Tata group’s cash cow and one of the largest Indian company, Tata Consultancy Services (TCS), has shown steady rise in the span of last 10 years, barring several bumps following the slump in Sensex and Nifty.
The stock was trailing the benchmark indices in 2017. However, the stock began gaining traction this year with over 12 percent return in the last one month. The company ended fiscal 2018 on a positive note, beating street estimates in the March quarter and soaring to its all-time high. Read on to find out what lies ahead for the company.
Company Overview:
TCS, a subsidiary of the Tata Group, is India’s largest IT service provider. The company has over 394,000 consultants spread across 46 countries. The company generates revenue from various verticals such as banking, financial services & insurance (BFSI); manufacturing segment; retail and consumer business; communication, media and technology (CMT) and others. BFSI dominated TCS revenue with around 39 percent in FY18. Other verticals such as retail and CMT contributed around 17 percent each to the total revenue of the company.
TCS has successfully sailed through various technological transformations during the last five decades of its existence. TCS is firmly placed above the big IT services providers in India such as Infosys, Wipro, HCL Technologies and Tech Mahindra not only in terms of revenues but also by market capitalisation. TCS is the largest company by market capitalisation in the country with a market cap of over ₹6 lakh crore. It is also placed among the most valuable IT services brand in the world. Its brand value has grown 14 percent from $9 billion in 2017, placing it among the top three IT services companies globally. The brand value of IBM and Accenture stood at $20 billion and $17 billion, respectively. When it comes to revenue generation, TCS alone generates around 70 percent of total funds for its parent company.
IT sector outlook:
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Esta historia es de la edición May 7,2018 de Dalal Street Investment Journal.
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